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Centralized or decentralized budgeting, bottom-up/top-down.

1. Prefer a centralized or decentralized approach to budgeting, why?

2. What is meant by bottom-up or top-down with regard to budgeting?

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1. Prefer a centralized or decentralized approach to budgeting, why?

I always prefer a centralized approach to budgeting, and this is the approach that many companies prefer also. In a centralized approach, it works as a top-down method. The budget is created and maintained by a centralized finance office, and the budget is then distributed to the various departments in the organization. One of the advantages to this approach is that it is more resourceful to centralize this process. One of the major downfalls of decentralized budgeting is that it becomes ...

Solution Summary

The solution discusses if centralized or decentralized budgeting is preferable, and also discusses what is meant by bottom-up or top-down with regard to budgeting.

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